More recently, a superior court judge rejected a lawsuit from Washington, D.C. Attorney General Karl Racine accusing Amazon of violating the district’s anti-competitive behavior laws by arguing, like Bonta, that third-party contracts artificially inflate prices. The new California lawsuit is nearly identical to that case, which Racine's office said it planned to appeal. The Washington, D.C. Superior Court judge who dismissed the suit wrote that merchants are free to sell wherever they choose, and that they can simply not sell their wares on Amazon if they don’t like the terms.
In 2019 Amazon said it would stop enforcing certain contract terms that blocked merchants from offering lower prices elsewhere. But according to Bonta's office, it continued the practice.
Bonta said he had confidence his suit would succeed under California laws barring anti-competitive behavior. He also said he hoped the Legislature — in which he previously served — would introduce legislation cracking down on business tactics that discourage competition.
Amazon will need to contend with California’s lawsuit as it faces mounting political pressure on Capitol Hill. The company has fortified its lobbying corps, and its CEO has personally urged senators to oppose antitrust legislation that would penalize Amazon and other tech giants for elevating their products over rivals’ offerings. The company has tried to enlist third-party sellers in that effort, arguing federal restrictions would hurt everyone who sells through the website.
Documents provided to POLITICO this summer appear to show Amazon seeking to undercut competitors selling on its platform. The California lawsuit says that Amazon has misled enforcement agencies and investigators from around the world.
Federal regulators are also scrutinizing the company’s business practices. The Federal Trade Commission is conducting a wide-ranging investigation of its retail, device and cloud computing operations, and scrutinizing the company over possible privacy violations and other consumer harms involving its Prime subscription business. It also recently began vetting Amazon’s $1.7 billion acquisition of robot vacuum manufacturer iRobot, and $3.9 billion takeover of One Medical, seeking to determine if the deals violate antitrust laws.
This is not the first time the California attorney general’s office has taken aim at Amazon. Bonta secured a court order last year compelling Amazon to disclose more information about Covid-19 case numbers among its workforce, and he has urged more oversight of a fulfillment warehouse’s environmental impact.
California lawmakers have also increasingly sought to rein in the tech industry in recent years. Democratic Gov. Gavin Newsom is weighing a bill that would set children's privacy and safety standards for websites, apps and platforms often visited by children under 18. A related proposal to create legal liability for platforms that addict kids stalled this year.
Josh Sisco contributed to this report.
